Posted by Larry DeBrock on Apr 26, 2011

In my Econ class we discussed the growing importance of “third party voices” in economic decision making. For example, the existence of a rancher willing to sell a remote piece of land to an individual wanting to buy and build on exactly such a remote piece of land would look like a match made in heaven; both parties see gains from the trade. However, if the transaction actually hurt a third party, that party might be able to successfully intervene. But, if that third party was, for example, a grizzly bear forced to move locations because of the human presence, such an intervention would only happen if concerned interest groups entered the arena as representatives of the unrepresented.

A March 24, 2011 story in the Wall Street Journal is yet another example of this type of intervention. The hamster thrives in fields of wheat and alfalfa. French farmers have switched from those crops to the more lucrative crops of wine and corn (remember how recognition of opportunity costs directs smart companies to allocate resources to high return uses). Now the government is recommending forcing farmers back to the crops that protect hamsters. The full details of the story are fascinating and I would urge you to read the WSJ article.